Sat, Aug 24, 2013 - Page 13 News List

Industrial output ends five-month drop

UNCERTAINTIES:The economics ministry said it would be hard to sustain the growth momentum this month, given concern over the QE exit and weak Chinese demand

By Helen Ku  /  Staff reporter

The industrial production index increased for the first time last month after five consecutive months of contraction, the Ministry of Economic Affairs said yesterday.

According to data compiled by the ministry, industrial output increased 6.38 percent from June and 2.07 percent from a year earlier, Yang Kuei-hsien (楊貴顯), deputy director-general of the ministry’s statistics department, told a press conference.

Production in the manufacturing sector — which accounts for more than 90 percent of total factory output — grew 5.81 percent month-on-month and 2 percent year-on-year last month, also ending five straight months of contraction, a statement by the ministry showed.

“The industrial output last month indeed achieved an annual growth after dropping for nearly half a year,” Yang said.

“However, it may be hard to sustain the annual increase this month, given a higher base last year,” he added.

As the US and Japanese economies are gradually recovering from recession and the overall economic condition in Europe has improved, industrial production is likely to maintain its growth momentum in the near term, the ministry said.

However, uncertainties such as the US Federal Reserve’s plan to halt its bond-buying program and China’s weakening domestic demand may hinder the nation’s export growth, it added.

With the launch of new handheld devices and growing demand for goods and services ahead of China’s National Day holiday in October, electronic component output is expected to continue growing this month, Yang said.

Increased steel production ahead of annual maintenance for steel mills and the scheduled start of CPC Corp, Taiwan’s (CPC, 台灣中油) cracker expansion should also help sustain annual growth in manufacturing output, he added.

Driven by strong demand, chips used in mid-end and entry-level mobile devices and electronic component production last month increased 6.47 percent month-on-month and 4.68 per year-on-year.

However, because of weaker-than-expected demand for high-end smartphones and decreased orders for televisions, electronics and optical products’ output last month dropped 5.22 percent month-on-month and 14 percent year-on-year, the ministry said.

Chemical material production last month increased 4.23 percent month-on-month and 6.66 percent year-on-year due to a rebound in crude oil prices and a lower base last year, while output in the basic metal sector grew 5.87 percent month-on-month and 11.56 percent year-on-year as companies raised production ahead of their plants’ annual maintenance.

According to the ministry’s survey, 46.9 percent of local manufacturers forecast industrial production this month would increase, and 49.4 percent forecast that the market value of the total output would grow this month.

Separately, the ministry yesterday said that wholesale, retail and restaurant sales dropped 0.7 percent year-on-year to NT$1.2 trillion (US$40.51 billion) last month.

The ministry attributed the decline to lukewarm demand for PCs and a higher base last year.

For this month, the ministry forecast sales in the domestic commercial sector would remain flat, despite August being a peak season for the tourism and restaurant businesses.

Other factors include the earlier start this year of the Ghost Month, which affected auto sales, the ministry said.

According to the ministry’s survey, about 49.2 percent of firms forecast sales in the domestic commercial sector would increase this month.

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